(Corrects paragraph 2 to state that shipping is one of the
largest emitters of sulphur, but not the largest)
* IMO to decide whether to introduce rules in 2020, or 2025
* EU, China already pushing for stricter regulation, sooner
* Ships are among world's biggest sulphur emitters
By Roslan Khasawneh and Keith Wallis
SINGAPORE, Oct 4 The global shipping industry is
bracing for a key regulatory decision that could mark a
milestone in reducing maritime pollution, but which could nearly
double fuel costs in a sector already reeling from its worst
downturn in decades.
The shipping industry is among the world's largest emitters
of sulphur behind the energy industry, with the sulphur dioxide
(SOx) content in heavy fuel oil up to 3,500 times higher than
the latest European diesel standards for vehicles.
To combat such pollution, the International Maritime
Organization's (IMO) Marine Environment Protection Committee
will meet in London on Oct. 24-28 to decide whether to impose a
global cap on SOx emissions from 2020 or 2025, which would see
sulphur emissions fall from the current maximum of 3.5 percent
of fuel content to 0.5 percent.
"One large vessel in one day can emit more sulphur dioxide
than all the new cars that come onto the world's roads in a
year," said Thomas Koniordos, head of business line
environmental solutions at Norway's Yara International.
"That is reason enough to cap emissions," added Koniordos,
whose firm makes scrubbers used to clean exhaust emissions.
Large container ships of 15,000-18,000 TEUs (20-foot
equivalent units) consume up to 300 tonnes of high-sulphur fuel
a day at sea, while a 300,000 deadweight tonne (DWT) supertanker
guzzles up to about 100 tonnes per day. Health experts say
sulphur is responsible for deadly heart and lung diseases.
The issue has been brewing for more than a decade and
shippers said the industry was now bracing for tighter
regulation to be introduced sooner rather than later due to
"The decision will likely be a political one - the European
Union is pressing strongly for 2020," said Arthur Bowring,
managing director of the Hong Kong Shipowners' Association.
EUROPE, CHINA TIGHTEN RULES
The European Union has already agreed that the 0.5 percent
sulphur requirement will apply in 2020 within 200 nautical miles
(370 km) of EU Member States' coasts, regardless of what the IMO
China, home to the world's busiest container ports, is also
demanding cleaner fuels.
Authorities in Shenzhen, the world's third biggest container
port, introduced tighter controls this month, demanding that
ships calling there do not use fuel with a sulphur content of
more than 0.5 percent.
Ship owners can comply with the tighter controls either by
switching away from the sludgy and sulphur-rich so-called bunker
fuels to diesel or liquefied natural gas (LNG), or by fitting
scrubbers to clean exhaust emissions.
A fuel-switch would impose extra costs on an already
troubled shipping sector, which has seen high-profile defaults
like South Korea's Hanjin as well as cases of stranded ships
with crew left onboard ships unpaid and unsupplied.
Using low-sulphur diesel instead of bunker fuel on a very
large crude carrier (VLCC) class supertanker would boost fuel
costs by around 44 percent from an average of $212 per tonne
this year for heavy fuel oil to $379 per tonne for gas oil,
according to figures from shipping broker Clarkson.
For traded oil markets, the shift to low-sulphur fuel will
"substantially reduce demand for bunkers in the run up to 2020
and increase demand for gasoil and alternative fuels including
LNG," said Christopher Haines, head of oil and gas at BMI
(Editing by Henning Gloystein and Richard Pullin)